After a volatile day swinging between gains and losses, US stocks closed up for the second straight session Thursday.
The S&P 500 was up 0.7% as the Dow Jones Industrial Average and Nasdaq both rose 0.6%.
Investors watched closely as Federal Reserve Chair Jerome Powell spoke to the Cato Institute’s 40th Annual Monetary Conference in Washington DC. In his speech he reiterated the Fed’s commitment to battling inflation first and foremost, but said he hoped it could be done without the, “very high social costs” associated with monetary tightening.
The speech was Powell’s last public appearance, before the Fed’s next announcement of a policy decision September 21st.
Thursday’s gains came on the heels of the S&P 500’s 1.8% surge Wednesday, as well as the Dow Jones Industrial Average gaining 1.4% and the Nasdaq rising 2.1% at the same time.
Other data investors were watching included initial jobless claims, which came in at the lowest reading since May. First time unemployment insurance filings were 220,000 in the week ending September 3rd, according to the Labor Department’s data Thursday. Economists had estimated it would come in at 240,000 claims, in consensus estimates produced by Bloomberg.
In Europe, the European Central Bank announced an unprecedented 0.75% rate hike and signaled there would be further increases to come as Eurozone inflation soared in the face of the rapidly accelerating energy crisis.
The increase came as investors are expecting the Federal Reserve in the US to deliver a third 0.75% rate hike. Strong economic data in labor and manufacturing have market participants expecting aggressive Fed action in the near term.
CME Group’s Fedwatch tool has predicted an 86% chance of a 75 basis point hike, which is up from a 69% likelihood just one week prior. Bank of America, Goldman Sachs, and Nomura have also increased their bets on a 0.75% hike this month as well.
Gamestop was up 7.5% after the meme stock announced it was partnering with crypto platform FTX on Wednesday. In its second quarter report, it revealed widening losses for Q2, at $108.7 million, and sales declining 4% year over year to $1.14 billion.
American Eagle outfitters was down 8.8% after an earnings miss, a pause in its quarterly dividend, and a warning that “demand trends remain difficult” in the current quarter.
Oil rose 1% after hitting a seven month low on Wednesday.
